A ROSS firm has been fined £120,000 for enticing people into making expensive calls to premium rate phone lines with promises of big prizes.

Premium line regulator PhonepayPlus said Wye Valley Promotions sent misleading letters telling people they had won a prize including £20,000, shopping vouchers and HD-ready televisions.

In reality it was a prize draw which the 'winners' had to make a premium rate phone call costing £1.53 per minute from a BT landline and lasting five and a half minutes, six £1.50 text messages plus network charges or enter by post.

Wye Valley Promotions says the regulator prevented it making refunds and is looking to appeal against what it thinks is a disproportionate penalty.

The regulator – which said the case was "very serious" – acted after complaints including some from relatives of a 93-year-old Alzheimer's sufferer and a couple in their 80s.

Personalised letters and claims forms which warned prizes would go to someone else if they went unclaimed were used to persuade people they had won big prizes.

Jo Prowse, acting chief executive of Phonepay Plus said: "Wye Valley Promotions Ltd mislead consumers with personal letters and 'claim forms' that led them to believe they had won big prizes, but in reality the letters were little more than adverts for a prize draw."

She added: "PhonepayPlus' Tribunal has ruled that it was a very serious case and ordered that Wye Valley Promotions must give a refund to consumers who request one."

A statement from Wye Valley Promotions said: "We have shown PhonepayPlus copies of our promotions on 32 previous occasions over the previous two years and not once were concerns raised or changes requested," the statement said.

"Over a 13-month period, 36 consumers contacted PhonepayPlus but, on the evidence of its own research, the average proportion of participants who complain to PhonepayPlus about their experience in our sector is 200 times higher than this.

"In accordance with our refund policy we asked PhonepayPlus for the consumers' contact details in order that we could refund them in full for telephone charges incurred.

"However, PhonepayPlus failed to respond, even when permission for disclosure had been given.

"We were eventually able to find the necessary details and refund the consumers.

"We can't understand why PhonepayPlus should wish to prevent us from making refunds.

"We are disappointed by PhonepayPlus' decision and by the disproportionate sanction levied which is not remotely related to any consumer harm. We will review the full decision carefully with a view to appealing to an independent body."